Trop50 Line Strengthens PepsiCo Profits By Diluting Beverages With Water
PepsiCo, America's largest food and beverage company, reported unusually strong results in the fourth quarter of 2011. Despite lingering consumer weakness, revenue was up 14 percent and profits grew seven percent. The company is known for integrating science into the production of snacks -- but the secret for its recent success is as simple as it comes. Just add water!
That's because one of the central drivers of growth at PepsiCo has been Trop50, a line of juices that's diluted with water to make it lower in calories than traditional juice. Trop50 Orange, the original flavor, is just 42 percent orange juice; as such, an 8 oz serving contains just 50 calories, less than half of what you get from normal OJ.
PepsiCo CEO Indra Nooyi explained in the company's Q4 earnings call that Trop50 "brought back users into the juice category who left the category because of the high calories of juice."
Of course, calorie-conscious juice drinkers could very well dilute their own OJ using tap water -- and thereby spend half as much. The only difference between that and Trop50 is that the latter is sweetened with calorie-free PureVia. That, and laziness on the part of morning juice drinkers, has been enough to make Trop50 a runaway hit. In October, a PepsiCo executive said that of Trop50, "We're selling everything we can make."
That's led PepsiCo to craft "mid-calorie" (read: water-diluted) versions of all sorts of beverages, from Pepsi to peach white tea. There are now a total of 12 varieties of Trop50 juice and tea.
Not that all this calorie cutting comes without a price. When our partner site Kitchen Daily conducted a side-by-side taste test of Trop50 and Tropicana Premium, a whopping 94 percent of respondents said they preferred the full calorie juice.
Related on HuffPost:
Loading comments… 
Posted: 02/15/2012 3:25 pm